Insolvency compensation
Insolvency compensation is a loss of earnings insurance policy for employees. In contrast to unemployment insurance, it covers salary claims for work that has already been performed over the last three months of an employment relationship if the employer has fallen into insolvency.
All employees subject to contribution obligations of employers who are subject to foreclosure in Liechtenstein or have employees in Liechtenstein are entitled to receive insolvency compensation. This also includes those who have not yet reached the minimum age for compulsory OASI contributions. Persons who exercise significant influence over the decisions of the employer are not entitled to make claims. These include, for example, co-owners of the company in question, members of the senior management body or persons who have a financial interesst in the enterprise.
Salary claims extending over the final three months of the employment relationship are covered by insolvency compensation, starting when
- bankruptcy proceedings have been brought in respect of the assets of the employer
- bankruptcy was rejected on the grounds of an insufficiency of assets to cover the cost of the proceedings
- salary claims against the employer were wholly or partially unsuccessful on one occasion in the past
This also includes a 13th or 14th monthly salary as well as bonuses and contractually owed and regular allowances, such as for example compensation for overtime, shift work, night work and Sunday work.
Insolvency compensation does not cover all other claims brought against the employer that are not recognised as insolvency claims or as 1st class claims in the bankruptcy proceedings, or family allowances such as child allowance as well as the remuneration of expenses or compensation claims brought e.g. on the grounds of the termination of the employment contract without notice.
Assertion of the claim
In order to exercise the claim, the employee must assert all claims against his employer before the competent court within the context of the bankruptcy proceedings. If bankruptcy proceedings are rejected, he must submit his claims credibly and accountably before the unemployment insurance agency, and must initiate execution proceedings against his employer.
Deadlines for assertion
The insolvency compensation claim (German only) must be submitted to the unemployment insurance agency before the Office of Economic Affairs at the latest 60 days after the unsuccessful execution or 60 days after publication of the court ruling on the initiation or rejection of bankruptcy proceedings. NOTE: Entitlement to insolvency compensation shall expire once these deadlines have passed.
Rights and obligations
The employee must do everything in his power to uphold his claims against the employer in the bankruptcy and execution proceedings. If salary claims are rejected or are not covered in the bankruptcy proceedings because the employee acted in a deliberate or grossly negligent manner, he must reimburse the insolvency compensation.
The insolvency compensation must also be repaid if the salary claim is not recognised as an insolvency claim or 1st class claim in the bankruptcy proceedings, or if the employer subsequently fulfilled the claim wholly or in part.
Level of the insolvency compensation
Unemployment insurance pays an initial instalment to the employee amounting to approximately 70% of the gross sum, because the statutory contributions or social insurance premiums are remitted directly to the responsible agencies. Following settlement with the social insurance agencies, the remainder will be paid out to the employee. The maximum compensation amounts to CHF 10,500.00 per month, which corresponds to the maximum sum that is subject to contribution obligations.